• Our HoR Isnaputra Iskandar and team set idx 2019 target at 7100 on expectation the macro picture will gradually improve and be less volatile than 2018. BI will continue to implement pro-active market policies and our Maybank strategists are long Indonesia in their 2019 outlook. Politics is not an issue in our view.
• We think global economy will remain challenging, and as such we expect Indonesia’s monetary policy to lean towards currency stabilization.
• We forecast a 50bps rate increase in 2019, lower than 2018’s 175bps. Oil price is the wild card in our base case assumptions for the current account deficit (CAD), currency, inflation and interest rate. ...See More
• We forecast the economy in 2019 to remain resilient, despite volatilities, at c. 5% YoY GDP growth, similar to 2018. The growth is likely to be supported by consumption (+5%) and investment (+6.4%). We forecast 2019 market earnings growth (with and without commodity companies) of 11.7-12.3%, driven by almost all sectors.
• With low oil prices and a stable IDR, there could be potential upside to our 11.7% growth forecast and this will benefit the cement and consumer sectors.
• Elections: what’s next? We expect the elections in April to be smooth and peaceful. There is no direct correlation between elections and GDP, but we note a tendency for rising fund flows and IDR appreciation ahead of past elections.
• Our FX team forecasts the IDR could strengthen 10% into the elections. We think whoever wins the election, will focus on the same major issues: infrastructure, logistics, income distribution and quality of human capital.
• Risk factors : global volatility, policy transmission time lag, unfavourable election outcome, disappointing earnings
• IHSG 7100 is based on 17x FY19E P/E (+1SD above mean) and 11.7% EPS growth.
• Our top picks are ASII, BBNI, BSDE, GGRM, ICBP, PTBA, PWON, RALS, SMGR and SMRA.
• Links : https://factsetpdf.maybank-ke.com/PDF/120220_MACRO__2f74e196389f4d79a777984903401b2a.pdf?

Maybank Kim Eng Research : Indonesia Strategy 2019 Outlook – Bit by Bit
• Our HoR Isnaputra Iskandar and team set idx 2019 target at 7100 on expectation the macro picture will gradually improve and be less volatile than 2018. BI will continue to implement pro-active market policies and our Maybank strategists are long Indonesia in their 2019 outlook. Politics is not an issue in our view.
• We think global economy will remain challenging, and as such we expect Indonesia’s monetary policy to lean towards currency stabilization.
• We forecast a 50bps rate increase in 2019, lower than 2018’s 175bps. Oil price is the wild card in our base case assumptions for the current account deficit (CAD), currency, inflation and interest rate.
• We forecast the economy in 2019 to remain resilient, despite volatilities, at c. 5% YoY GDP growth, similar to 2018. The growth is likely to be supported by consumption (+5%) and investment (+6.4%). We forecast 2019 market earnings growth (with and without commodity companies) of 11.7-12.3%, driven by almost all sectors.
• With low oil prices and a stable IDR, there could be potential upside to our 11.7% growth forecast and this will benefit the cement and consumer sectors.
• Elections: what’s next? We expect the elections in April to be smooth and peaceful. There is no direct correlation between elections and GDP, but we note a tendency for rising fund flows and IDR appreciation ahead of past elections.
• Our FX team forecasts the IDR could strengthen 10% into the elections. We think whoever wins the election, will focus on the same major issues: infrastructure, logistics, income distribution and quality of human capital.
• Risk factors : global volatility, policy transmission time lag, unfavourable election outcome, disappointing earnings
• IHSG 7100 is based on 17x FY19E P/E (+1SD above mean) and 11.7% EPS growth.
• Our top picks are ASII, BBNI, BSDE, GGRM, ICBP, PTBA, PWON, RALS, SMGR and SMRA.
• Links : https://factsetpdf.maybank-ke.com/PDF/120220_MACRO__2f74e196389f4d79a777984903401b2a.pdf?

Disclaimer: This message is for information purposes only. Reproduction or dissemination to third party is prohibited. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information nor shall it be construed as an offer/solicitation or recommendation to buy/sell any stocks . Investors should make their own informed decisions by consulting your own independent adviser(s) before investing. We accept no responsibility or liability for loss or damage that may arise from the reliance of this message. For the full information regarding the stocks mentioned herein please refer to the relevant websites.

RHB Indonesia Morning Cuppa: 17 Dec 2018
Top Story:
♦Indonesia Auto & Autoparts: 2019 Outlook: New Model Cycle To Boost Sales
Economics and Politics
♦Indonesia government may resume talks to cut income tax rate
Industry:
♦New regulation for excise tax on tobacco products (CHT) under PMK No.156/PMK.010/2018
♦Commercial vehicles in 11M18 was recorded at 240,902 units (+18.9% YoY)
♦Financial management for Hajj (BPKH) will allocate 20% of the funds to invest in Arab Saudi directly
♦Indonesian coal miners are targeting to increase production of coking coal in 2019, to boost its margins
Corporate:
♦Semen Indonesia (SMGR IJ) November 2018 recorded its 11M18 sales at 27.9m tonnes (+5.6% YoY)
♦BNI recorded an increase in agribusiness sector credit of 5.1%
♦Adaro Energy targets 2 electric steam power plants will be done in FY19
♦Mitra Adiperkasa (MAPI IJ) to open 170 new outlets of MAP Aktif (MAPA IJ) and MAP Boga (MAPB IJ) in FY19
♦Erajaya (ERAA IJ) targets to open 300 new outlets in FY19
♦Medco Energi (MEDC IJ) allocates USD110mn capex for power business in Riau and Ijen, East Java
♦AKR Corporindo (AKRA IJ) sets IDR600-700bn capex budget in FY19
♦J Resources Asia Pasifik (PSAB IJ) targets revenue of USD200mn in 2019
♦BNI Life Insurance and Perum Perumnas will extend their coorporation
To see the full report, kindly click the link: https://bit.ly/2Ev2K56
Disclaimer: This message is for information purposes only. Reproduction or dissemination to third party is prohibited. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information nor shall it be construed as an offer/solicitation or recommendation to buy/sell any stocks . Investors should make their own informed decisions by consulting your own independent adviser(s) before investing. We accept no responsibility or liability for loss or damage that may arise from the reliance of this message. For the full information regarding the stocks mentioned herein please refer to the relevant websites.